Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on SIEMENS AG-REG. We currently have 21 research reports from 1 professional analysts.
Frequency of research reports
Research reports on
Digitalisation has been a must-have option for years!
08 Dec 16
Siemens presented its digital business on the innovation day. According to the company, total generated digital revenues grew 12% and reached €4.3bn. Around €3.3bn is software revenues and €1bn service revenues. The company employs over 17,500 software developers or 5% of the total workforce. The digital business contributed 5.4% to total revenues and is cross functional. The main digital activities are located in the Digital Factory division which generated total revenues of around €10.2bn, mainly with PLM software solutions. Assuming a similar cost structure as the software industry, the EBIT margin should range between 16% and 17%, which is a little higher than the EBIT margin of the Digital Factory division (15.3%). The acquired company Mentor Graphics will contribute an additional €1.1bn to the “Digital Factory” in the financial year 2016/17. Siemens is promoting the cloud-based and open operating system for the Internet of Things MindSphere. MindSphere will work as a platform between software and service solutions and electrification and automation.
Mentor Graphics, a perfect but expensive match
14 Nov 16
Siemens acquired Mentor Graphics for an enterprise value of US$4.5bn, or US$37.25 per share, in cash. Based on the closing price of 11 November, Siemens paid a premium of 21%. The closing of the deal is expected in Q2 16/17 (end of March). Mentor Graphics will be part of the PLM software business and integrated into the Digital Factory division. The valuation of the company is quite ambitious. Siemens is paying EV/Sales (2017E) 3.7x, EV/EBITDA 23.1x and EV/EBIT 34.3x. Siemens’ management could have bought the company earlier. In January 2016, the share priced collapsed 36.5% to US$17.43. Before the acquisition price was announced, the share price had again reached all-time high levels. Around 99.24% of the shares is owned by institutional investors, of which around 17% are hedge funds. Elliot Management, which owns 8% of the company, has already agreed to support the transaction.
Exceeding twice-raised guidance
10 Nov 16
In Q4 16 ending in September, revenues increased by 2.9% to €21.9bn. Profit from the so-called industrial business reached €2.45bn (market estimates €2.41bn). EBIT grew 9.8% to €1.79bn and the EBIT margin improved from 7.6% to 8.2%. Net income increased 20.1% to €1.15bn. Order intake however declined 14% to €20.3bn mainly due to large orders in Q4 15 (windpower of around €1.2bn and a large power & gas order in Egypt). Base orders even increased marginally in Q4 16. The book-to-bill ratio reached 0.93x. In the financial year 2015/16, revenues increased 5.3% to €79.6bn and the order intake rose 5% to €86.48bn. The book-to-bill ratio reached 1.09x. Net income declined 25.2% to €5.45bn but excluding the income from the sale of the hearing aids business and the joint venture with Bosch (BSH), net profit remained stable. Management proposed a dividend increase of €0.10 to €3.60 per share. The guidance for 2016, which was raised twice, was exceeded.
Return on equity reduced by law
13 Oct 16
In Germany, the regulatory environment for the grid network has changed. The German Network Agency (Bundesnetzagentur) has changed the imputed return on equity which will apply for the next five years. The current regulatory periods for gas and electricity will expire in 2017 (gas) and 2018 (electricity). The new regulations for gas will apply as of January 2018 and for electricity 2019. The new return on equity for new assets will be reduced from 9.05% to 6.91% and for so-called old assets (activation prior January 2006) will decline from 7.14% to 5.12%. In each case without inflation and before corporate tax and after trade tax. According to estimates the lowered return on equity (equity ratio 40% max.) will reduce the yield by around €650m per year.
Streamlining the Process Industries and Drives division
28 Sep 16
Siemens is planning to reduce the workforce by 1,700 in the Process Industries and Drives division. Management had previously intended to reduce the workforce by a total of 2,500, of which 2,000 in Germany. According to the agreement with the trade union, only 1,700 will be made redundant through early retirement, severance payments and transfer to other business units. The total amount to be spent will range between €250m and €300m, booked in the fourth quarter of the financial year 2015/16 at the end of September. We expect total restructuring charges of this division to reach €210m in Q4 15/16.
Profitability driven by strong execution
04 Aug 16
In Q3 15/16 ending in June, the order intake increased 6% to €21.06bn (at constant currency +10%) and revenues 5.1% (at cc +9%) to €19.8bn. The order backlog reached a record level of €116bn and the book-to-bill ratio 1.06x. Gross profit increased 12.8% to €5.99bn and the gross margin rose from 28.2% to 28.7%. The EBIT margin jumped from 6.8% to 10%. Eight out of nine divisions were in the target margin range. Only the Process Industries and Drives division missed the target margin. Net income declined marginally by 2.1% to €1.33bn.
08 Dec 16
Elderstreet stake acquired 02 GENERAL NEWS Globalworth premium In this issue Venture capital firm Draper Esprit has taken a 30.8% stake in venture capital trust manager Elderstreet. Both investment managers focus on the technology sector and they will be able to co-invest. Elderstreet has investments in a number of AIM-quoted companies through its VCTs. The purchase was funded by an issue of Draper Esprit shares worth just over £250,000. Simon Cook, the chief executive of Draper Esprit, is a former partner at Elderstreet so he knows the business and the people who run it, although he did leave more than 14 years ago. Cook has previously acquired portfolios from 3i and Cazenove, two other firms where he has worked. Draper Esprit has an option to acquire the remaining shares in Elderstreet, which has more than £25m under management. Adding Elderstreet to the group enables Draper Esprit to offer investors a range of EIS funds, VCTs and an ISA qualifying listed evergreen patient capital fund. The enlarged group has venture capital assets under management of more than £350m. At the end of September 2016, Draper Esprit had a net asset value of 352p a share, which is similar to the current share price. The June 2016 flotation price was 300p a share. Draper Esprit is quoted on Ireland’s Enterprise Securities Market as well as AIM.
Focused on the long term
08 Dec 16
These are rare events but it is nice to see a management use its public listing advantageously to trade short-term dilution in EPS for the optionality of asymmetric upside in the long term. With over £10m already in the balance sheet, ABD has successfully raised £5.4m gross in a placing and expects to raise another £1m from an offer. We were not surprised to learn that the placing was over 3.5x oversubscribed. How many listed UK companies are positioned to take advantage of the digital revolution in the automotive industry? The additional investment in new people, facilities, products & services should be dilutive to FY2017-18 EPS but this is small price to pay to establish the leading supplier of integrated test, measurement and simulation solutions to the autonomous vehicle industry. Our forecasts assume that growth will accelerate from FY2019. We raise our target price to 575p based on 15x FY2019 EPS, equivalent to Ricardo, the only other UK stock which has embraced the optionalities offered by the technological changes in the automotive industry.
07 Dec 16
Severfield’s (SFR’s) H117 results were well ahead of the previous year; margin performance and order book development cause us to raise our FY17 profit expectations. This combination has also proved to be a catalyst for share price outperformance following the results. Revenue growth and further margin development towards management’s stated aim of doubling FY16 PBT by 2020 can sustain further progress.
Exceptional trading continues
08 Nov 16
Keywords has announced that the strong trading in localisation and audio services has continued into H216. In particular, the Synthesis business acquired in April continues to benefit from exceptionally strong trading. Full-year results are now expected to be materially ahead of consensus and we upgrade our FY16e EPS by 13%. Erring on the side of caution, we have not changed our FY17 estimates significantly. Nevertheless, we believe the company does have a platform to sustain double-digit earnings growth, and hence medium-/long-term prospects for further share appreciation remain good.
N+1 Singer - Waterman Group - Encouraging AGM statement in line with expectations
09 Dec 16
This morning’s AGM Statement confirms that trading in the first four months of the year to 31st October was in line with expectations. Revenue was slightly above the prior year period and cash collection has remained strong. The Group has reiterated its commitment to maintaining a progressive dividend policy. The statement is encouraging and we therefore leave our forecasts unchanged. We note the attractions of a 5% dividend yield and consider the shares inexpensive at 4.5x FY’17 EV/EBITDA.